STATEMENT BY HUD SECRETARY SHAUN DONOVAN ON HOUSE COMMITTEE PASSAGE OF CHOICE NEIGHBORHOODS INITIATIVE

A recent announcement by the HUD secretary has just thrown another spanner in the mix as far as investing in US real estate goes. Already, far too much interference by the US Government Inc has skewed and in many cases destroyed the independent nature of the real estate market. Once one takes into consideration the fact that US banks own 22 million residential properties, and HUD foreclosures are mostly sat rotting, the introduction of $65 million seems like a drop in the bucket, and we suspect that most of this will vanish into a few select pockets in any case. Regardless, this is the announcement:

Yesterday the House Financial Services Committee took a key step toward enactment of a signature Obama Administration priority, the Choice Neighborhoods Initiative. This proposal is designed to transform distressed neighborhoods and public and assisted housing developments into viable and sustainable mixed-income neighborhoods by linking housing improvements with appropriate services, schools, public assets and access to jobs.

The initiative was passed on a 42 - 27 voted by the Committee as part of a larger public housing measure (H.R. 5814) that also included proposals aimed at clarifying federal rules for replacement of demolished housing units, and providing new methods for financing of public housing. Choice Neighborhoods was originally funded as a $65 million demonstration project in HUD's 2010 funding bill, and yesterday's Committee action marks an important milestone in the effort to move beyond this pilot concept and establish the program on a permanent basis.

The following is a statement by HUD Secretary Shaun Donovan:

This is a crucial step toward encouraging viable communities that connect families and individuals to quality housing, more jobs, better educational opportunities, and greater community support,” said Secretary Donovan. “I want to thank the members of Congress we worked closely with to refine this proposal – specifically, Committee Chairman Barney Frank, and Housing and Community Opportunity Subcommittee Chair Maxine Waters. I look forward to continuing to work with them and their colleagues as this proposal moves forward.

It really is hard to imagine what $65 million is going to achieve. By the time the various fingers in the pie have taken their cut - less than half of this will end up where it belongs, so - just more spin and a slight addition to the tax burden we imagine.